ACM Research, Inc. (ACMR) reported its third‑quarter 2025 results on November 5, 2025, posting revenue of $269.2 million—up 32% from $200.5 million in Q3 2024—and a non‑GAAP earnings per share of $0.36, which missed the consensus estimate of $0.47 by $0.11. The company’s gross margin contracted to 42.1% from 51.5% a year earlier, reflecting a shift toward lower‑margin product mix and higher raw‑material costs.
Revenue growth was driven primarily by the company’s advanced wafer‑processing tools, which saw a 45% increase in sales to AI and data‑center customers. The horizontal plating technology and the newly shipped KrF Track platform contributed an additional $12 million in revenue, while legacy equipment sales lagged behind, falling 8% year‑over‑year. The mix shift toward high‑margin AI‑centric tools partially offset the margin squeeze but was insufficient to maintain the previous 51% gross‑margin level.
Margin compression stemmed from a combination of higher component costs, inventory write‑downs, and a 15% increase in operating expenses related to research and development and sales‑and‑marketing initiatives. The company’s CFO noted that the lower margin sits at the lower end of ACM’s long‑term target range of 42%–48%, signaling that cost pressures are beginning to erode profitability even as revenue accelerates.
In light of the margin pressure, ACM trimmed its full‑year 2025 revenue guidance to $875 million–$925 million, down from the prior $850 million–$950 million range. The new midpoint of $900 million falls slightly below analyst consensus of $914–$930 million, indicating management’s cautious stance on near‑term demand while still affirming confidence in the company’s long‑term growth trajectory.
CEO Dr. David Wang emphasized that the capital raise of $623 million in Shanghai will be deployed to accelerate next‑generation tool development and expand production capacity, positioning ACM to capture the growing AI and data‑center market. CFO Mark McKechnie highlighted that operating expenses are rising, but the company remains focused on maintaining a gross margin within its target range through disciplined cost management.
Investor sentiment was mixed: while the revenue beat was welcomed, the EPS miss and margin contraction prompted a cautious outlook from analysts, who noted that the company’s profitability challenges could temper enthusiasm for the near‑term guidance. The market’s reaction underscores the importance of margin health in evaluating the company’s earnings performance.
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